How Mobile and Social Loyalty Programs Can Work for Your Business

In this new world order, everyone is scrambling to push out a mobile product or a social solution.

In fact, “mobile” is so hot today you can often put the word in front of traditional product categories and create entire new industries: mobile payments, mobile ordering, mobile marketing – to name only a few.

And “social” is being connected to everything from entertainment to major purchases to everyday household needs.

But does it all make good business sense?

If you’re a small to mid-size business owner, where do you put your resources to ensure you take advantage of the benefits of mobile and social without getting caught up in the hype?

Loyalty marketing is one place you should definitely take a hard look at.

Loyalty marketing has been enjoying a revolution of sorts, due in large part to the fact that mobile and social technologies are evolving at a breakneck pace. Smartphones, those ubiquitous mini-computers everyone carries, offer a unique opportunity to completely change the paradigm of customer/merchant interaction. In fact, they already are.

Mobile advertising is poised to grow into a 20 million USD business by 2015, according to Gartner Institute. And a study from Juniper Research shows that mobile coupons are 10 times more likely to be redeemed than traditional ones.

Add in social media, which is the preferred method of sharing shopping and brand experiences (55 percent of online shoppers prefer to share their purchases on Facebook), and you’ve got a powerful combination to help grow your business.

However, when considering investing in a mobile or social loyalty program for your business there are some key considerations. Your biggest and most important task is to determine if the solution is nothing more than a mobile or social face on a traditional application or if it actually drives a shift in consumer convenience and behavior, the latter of which will drive higher profits for your business.

Unfortunately, there are plenty of solutions that are nothing more than a mobile or social interface on an otherwise unchanged product.

For example, in the mobile payment space, there are dozens of applications that allow consumers to store their credit card numbers in their mobile phone then present the phone as a surrogate for a credit card at the point of sale. Nothing about the checkout process has changed by these apps other than the form factor of the credit card.

There are a few noteworthy applications, however, that change the checkout process entirely.

Take TabbedOut for example. While consumers do store their credit card numbers within the application, the mobile app completely alters the method of checking out by allowing the consumer to close their check and complete payment without any interaction from the wait staff.

Compared to a mobile app that simply allows consumers to present their credit card number at the point of sale via an onscreen QR code or NFC transmission, interesting apps like TabbedOut have the potential to drive significant value for your business.

The same is true for loyalty programs.

It’s entirely possible to “mobile-enable” a traditional card-based loyalty program by allowing your customers to store their card numbers on their phones and enabling the collection of mobile numbers on sign-up forms for outbound SMS text marketing campaigns.

However, compare that method to a mobile loyalty program that is designed from the ground up to leverage the two-way communication capabilities of a mobile phone to completely change the way consumers participate and interact with your loyalty program. In many cases, these “mobile first” loyalty programs offer increased consumer experience and easier in-store operations, driving higher consumer participation and engagement than traditional programs.

In a similar fashion, it’s possible to “social-enable” any loyalty program by simply adding a Facebook “Like” or Twitter “Share” button to email communications, web sites, and mobile applications. These buttons make it convenient for consumers to share your program with their friends if they are so inclined and remember to do so.

Try comparing these techniques to a loyalty program that is also a social application (i.e., Zynga’s Farmville game is not just a page, but an application in which players interact): consumers connect with your business by granting permissions to the social loyalty application. These permissions grant the social loyalty app the ability to collect information from the consumer’s social media account and permit that app to post on their behalf for all their friends and followers to see.

Suddenly, your loyalty program can go socially viral through automatic check-in and sharing features that happen independently even when your customers forget – but always with their permission. The difference between these two approaches couldn’t be more dramatic in their effectiveness.

A good mobile/social loyalty program should offer consumers increased choice, convenience, and control while still being easy to operate. In addition, it should prove its worth to your business through clear and concise ROI metric reporting.

In creating MercuryLoyalty, ease-of-use was a top priority – for both merchants and their customers – without sacrificing data collection and analysis sophistication.

Because the solution is integrated into a merchant’s POS system, customers can collect customer data in several buckets including contact info, demographics, purchase history, promotional response, and social usage/response. Couple this intelligence with digital marketing, and you can create highly effective customized promotions.

You can tag offers as they go out and track each individually as they come back in, allowing you to “close the loop” on your marketing campaigns and measure your spending against generated results. It is not unusual for a digital marketing promotion, such as an SMS text message broadcast, to generate $5 or more in return for every $1 spent on the campaign.

It should deliver a paradigm shift for you and your customers – going way beyond a simple mobile interface on a traditional product or social integration that centers on “Like” and “Share.”

Look for solutions that leverage and work with your existing technology investments, are easy to use, but sophisticated, and offer closed-loop ROI reporting to prove the program’s value to your business. It takes a little homework, but your customers, and your accountant, will thank you.

About the Author:

Travis Priest is Vice President of Loyalty at Mercury where he leads the company’s strategy and execution in this space via its new MercuryLoyalty solution. A world-class technology visionary with a proven track record of delivering market and shareholder value, Travis pioneered mobile and social loyalty marketing at Sundrop and continues his innovative work at Mercury.

About the Company:

Mercury is a trusted innovator in POS-integrated technologies for payment processing, card data security, gift cards and loyalty. Recognized for around-the-clock support and service, Mercury is an award-winning partner to more than 500 POS independent software vendors and 2,500 POS resellers serving thousands of merchants nationwide. Mercury is pioneering the “social POS,” empowering merchants to identify, acquire, and retain customers through unique engagement and closed-loop measurement using Mercury’s patent-pending SaaS loyalty platform.